This month, federal agencies and FINRA have announced significant privacy enforcement actions that have resulted in millions of dollars in fines. The U.S. Department of Health and Human Services (HHS) imposed a $4.3M fine on a health plan for violations of the HIPAA Privacy Rule; the Federal Trade Commission (FTC) settled with several resellers of consumer reports allegations that the resellers failed to adequately safeguard consumer information; and FINRA imposed a $600K fine on two securities firms for failure to safeguard access to customer records. Here are the details:

As reported last week, on Thursday the Department of Health and Human Services ("HHS") issued its long-anticipated Notice of Proposed Rulemaking ("NPRM") on Modifications to the Health Insurance Portability and Accountability Act ("HIPAA") Privacy, Security, and Enforcement Rules under the Health Information Technology for Economic and Clinical Health Act (the "HITECH" Act). For those of us who subscribe to numerous technology and law listservs, this meant emailboxes flooded with opinions, criticism, speculation, and flat-out fear mongering. We thought people might like to know what the proposed modifications actually say, and what they mean. So, this post provides Part One of a FAQ on the 234 page NPRM. This post, Part One, addresses general issues (including significant changes involving subcontractors) and proposed modifications to the HIPAA Security and Enforcement Rules. Part Two, later this week, will address the proposed modifications to the HIPAA Privacy Rule.

On February 17, 2009, Congress signed into law the Health Information Technology for Economic and Clinical Health or "HITECH" Act ("HITECH" or the "Act") as part of the American Recovery and Reinvestment Act. The HITECH Act requires entities covered by the Health Insurance Portability and Accountability Act ("HIPAA") to provide notification to affected individuals and to the Secretary of Health and Human Services ("HHS") following the discovery of a breach of unsecured protected health information. HITECH also requires business associates of HIPAA-covered entities to notify the covered entity in the event of the breach. The Act required HHS to issue interim final regulations with respect to the new breach notification requirements. On August 24, 2009, the HHS interim final regulations were published in the Federal Register.